Required information Problem 11-26A (Algo) Recording and reporting stock transactions and cash dividends across two accounting cycles LO 11-3, 11-6 (The following information applies to the questions displayed below.) Sun Corporation received a charter that authorized the issuance of 109,000 shares of $4 par common stock and 20,000 shares of $100 par, 4 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation. Year 1 Jan. 5 Sold 16,350 shares of the $4 par common stock for $6 per share. 12 Sold 2,000 shares of the 4 percent preferred stock for $110 per share. Apr. 5 Sold 21,800 shares of the $4 par common stock for $8 per share. Dec.31 During the year, earned $397,200 in cash revenue and paid $240,900 for cash operating expenses. 31 Declared the cash dividend on the outstanding shares of preferred stock for Year 1. The dividend will be paid on February 15 to stockholders of record on January 10, Year 2. Year 2 Feb. 15 Paid the cash dividend declared on December 31, Year 1. Mar. 3 Sold 3,000 shares of the $100 par preferred stock for $120 per share. May. 5 Purchased 450 shares of the common stock as treasury stock at $8 per share. Dec.31 During the year, earned $249,700 in cash revenues and paid $178,200 for cash operating expenses. 31 Declared the annual dividend on the preferred stock and a $0.50 per share dividend on the common stock. Problem 11-26A (Algo) Part a Required a. Organize the transaction data in accounts under an accounting equation. (Enter any decreases to account balances with a minus sign. Not all cells require input.) Accounting Equation Stockholders' Equity Assets = Liabilities Event No. Cash Dividends Payable Preferred Stock Common Stock Paid-in Capital in Excess of Par- Preferred Stock Treasury Pald-in Capital in Excess of Par Common Stock Stock Retained Earnings Account Titles for Retained Earnings Year 1 Jan.5 + Jan. 12 + + + + + + Apr.5 Dec 31 + + + + + + Dec.31 Dec. 31 + + Bal 0 0 + 0 + 0 0 + 01 - ol + 0 + + + + + + Year 2 Feb. 15 Mar 3 May 5 Dec.31 Dec.31 Dec 31 Bal. + = + + + + 0 + 0 + + 0 + Dividends Operating expenses Service revenue Problem 11-26A (Algo) Part C-1. What is the number of common shares outstanding at the end of Year 1? At the end of Year 2? How many common shares had been issued at the end of Year 1? At the end of Year 2? (Amounts to be deducted should be indicated with minus sign.) Shares of Common Stock Shares Shares Issued Outstanding Year 1 Totals 0 0 Year 2 0 May 5 Mar. 3 Feb. 15 Dec. 31 c-2. Are there any differences between issued and outstanding common shares for Year 1 and Year 2? Issued common shares Outstanding common shares Yes No